World cocoa prices hit fresh record highs on Thursday (8 February) as traders continued to scramble for supplies, predicting ever wider deficits this season and with concerns growing for the next.
The surge in prices is filtering through to retail shelves, with Hershey expecting to see a further slowdown in demand for its products from cash conscious customers after its sales volumes slid 6.6% in the fourth quarter.
Volumes at its rival, Cadbury maker Mondelēz, also fell last quarter.
"Going back 47 years, almost every major price blip was followed by a massive 20-50% price break, within one to two years. Is this situation different? According to my sources in the cocoa bush of West Africa...YES!" said Jim Roemer, meteorologist and commodity trading advisor at Best Weather Inc.
"At least for now, a squeeze situation may well continue for another month or two," he added, citing current damage to the cocoa crop from strong Harmattan winds in top producing region West Africa.
Benchmark ICE London cocoa futures LCCc1 hit a record £4,577 a metric tonne and were trading 4.7% higher at £4,546 by 12:46 GMT. Prices have roughly doubled since the start of last year.
In New York, benchmark ICE cocoa futures CCc1 hit a new high of $5,625 a tonne and were last up 3.6% at $5,602, having risen about 90% since the start of last year.
Exporters and pod counters in No. 2 cocoa producer Ghana told Reuters output for the current 2023-24 season is expected to reach just 475,000-500,000 tonnes versus 655,000 the last year.
Last week, a Reuters cocoa poll forecast a global deficit of 375,000 tonnes in the 2023/24 season, more than double that indicated in the previous poll in August, and indicating a third successive global deficit for the market.
An industry source told Reuters that traders feared the shortage will extend into next year, with missing volumes from this season's crop having to be filled with beans from the next.
"What happens if the crop is poor next season?" he asked.
In other soft commodities, raw sugar SBc1 slipped 0.5% to 23.77 cents per lb, while white sugar LSUc1 rose 0.3% to $658.20 a tonne.
Arabica coffee KCc2 fell 0.5% to $1.8705 per lb and robusta LRCc2 was little changed at $3,114 a tonne.